Wages are low, debt is rising, and our economy is as vulnerable as it was five years ago. Yet the Christmas binge is back

It’s the sticky chicken lollipops that are the most baffling: £14 for a box from M&S, complete with a “sweet soy, mirin” – a Japanese condiment, apparently – “and ginger glaze”.

“Don’t bother – they are rank,” advises one poster on Mumsnet, but at both ends of the market, 2013 feels like the year of the absurd canapé, and one presumes that poultry done up to look like sweets is proving just as popular as spring rolls, sushi and the already legendary Bubble Bobble King Prawns (£1 for 10 from Iceland, but be warned: they involve Rice Krispies). Millions of us now obviously require a lot more than Christmas dinner, booze, and a smattering of Twiglets: £19bn is forecast to be blown this season on food and drink, up 3.9% on last year.

And under the tree? The drooled-over Sony PS4, a snip at £350, with games selling for around £50 each. For Dad, a selection of those boxed-up CDs that the music industry is using to wring the last drops out of its inventory – like Bob Dylan’s Complete Album Collection, which sells for the best part of £150. A tablet or two, even for Grandma and Grandad – the 128Gb iPad Air looks nice, at £740.

Forecasts of Christmas spending seem mixed: 2012’s figures suggested an average household spend no higher than in 2006 and people remain driven to find bargains, but there have been credible predictions of a 3.5% rise in 2013, and yuletide spending exceeding £40bn. Certainly, the seasonal noise suggests pathological consumerism is back in full effect, with near riots on so-called Black Friday, internet shopping breaking records, and adverts – adverts! – being treated as news events. “Britain’s Christmas spending binge leaves US trailing” was a headline last week on Bloomberg, which surely spoke volumes.

Meanwhile, the grim state of far too much of the economy is unchanged: 21% of employees are paid less than the living wage, and part-time and temporary jobs run rampant. The weekend brought news that, for the first time, more than half the 13 million Britons classified as being poor live in working households: a real watershed that needs to be endlessly highlighted. Even for people higher up the income scale, life remains pinched and anxious: petrol bought journey by journey; bills deferred; dread when a replacement car has to be bought. The fact that the ongoing fall in real wages has become a political cliche does not make it any less real: between 2010 and 2012, real earnings fell in every part of the UK – by 7.5% in London, and a mind-boggling 8.1% in Yorkshire and the Humber.

So, what pays for the sticky chicken lollipops and iPads? People are raiding their savings, which have lately undergone their biggest drop in 40 years, enough to prompt a former Downing Street adviser to warn that such figures are “desperately worrying … If you just withdraw money and spend you are talking about a recipe for long-term economic decline.”

And then there is debt. The Office for Budget Responsibility says that the ratio of household debt to income is set to start increasing again, and at a faster rate than it predicted in March. By 2015, household debt, including mortgages, is projected to exceed £2tn. And the critical point is how it is distributed. Last week, the Resolution Foundation’s ever-insightful Gavin Kelly had a piece in the Financial Times warning that a sixth of private debt is held by households that have less than £200 a month to cover anything more than basic essentials. Nearly a third of mortgage debt, he pointed out, is owed by people who have borrowed more than four times their annual income. And a watershed moment will be reached when interest rates start to go up again.

Which brings us to the next bit of seasonal good news. According to the OBR, unemployment will fall to 7.1% in 2014, and 7% the year after that. Seven per cent, let us not forget, is the rate of unemployment at which Mark Carney has said that the Bank of England will start to “reassess” its policy on interest rates. So far, he says, the figure represents a “threshold” rather than a trigger, but rates will sooner or later have to rise. As and when that happens, on the assumption that wages are hardly likely to skyrocket, tight household budgets could start to snap, and we may well be faced with echoes of 2007-8: mortgage defaults, a sudden crisis of confidence – and, this time, no munificent government to clear up the mess.

These are the ghouls swirling around this Christmas. For all the talk of growth, private investment is at its lowest level since the 1950s. Britain’s export performance remains disappointing: in the third quarter of 2013, exports suffered their biggest fall in more than four years. Pledges to somehow rebalance the economy show no sign of becoming a reality, and we are stuck with much the same model that made us so vulnerable five years ago, in which people work in shops, earning money to spend in other shops, and top up their budgets using credit.

The City, meanwhile, is brimming with both good cheer and grim auguries. Ten days ago, the return was announced of synthetic collateralised debt obligations: as one deadpan report put it, “the securities that probably contributed most to losses during the financial crisis” – revived by Citi, and marketed for the first time since 2007.

Quietly, jitters about all this are being expressed on the right, just as much as on the left. Last week, the Tory Bow group published its crisply written response to the chancellor’s autumn statement. “The current UK economic growth figures remain reliant on the financial sector and a rising housing market,” it said. “The bubble that burst in 2008 is being slowly reinflated, meaning [that] the danger of returning to the ‘boom and bust’ model of the past has never been higher.”

What’s driving the recovery, it seems, is thinking akin to the modern spirit of Christmas: an all-too-familiar urge to spend way beyond our means, and an aversion to worrying about the inevitable hangover. As those daft canapés do the rounds, some will be raising their glasses to growth. More sober minds will be thinking of no end of trouble, bubble-bobbling just under the surface.